Jonathan Brearley, the head of Ofgem, has defended the profits of energy suppliers, arguing that they are reasonable despite the current challenges of high energy bills for households and businesses.
Mr Brearley maintains that these profits, typically ranging from one to two per cent of companies’ expenditures, are essential for investing in improving customer service.
Jonathan Brearley stressed Ofgem’s responsibility in preventing energy suppliers from overcharging consumers, underscoring the effectiveness of the price cap in protecting customers.
When questioned by STV News, the energy regulator’s chief reiterated that suppliers are pricing their services based on costs plus a modest margin.
Jonathan Brearley noted that the profit margins allowed by the price cap, ranging from about one penny to 2.5 pence in the pound, are a reasonable reflection of the operational costs of running an energy company.
Mr Brearley said: “That, to me, is a fair reflection of what it costs to run a company. We don’t think profits are excessive. We make sure of that through the price cap.”
